This is an annual campaign they do whereby four local charities for each service station are profiled and customers get to put their plastic disc into the bucket of the charity that resounds with them. Each service station has around $4,000 to give away from a total pool of $1m. You may recall last year I had a look at one of the recipient charities.
I have a bit of discomfort with the whole deal. It’s really a popularity contest, where those groups with the best “brands” get the most tokens. Not really taken into account is what the organisation actually will do with the money, nor if they actually need it in the first place. For some of these charities, $1,000 (assuming each charity gets ¼ of the money) that’s a big help, for others, its hard to see how this makes any difference.
I would love to know how much they are spending marketing this programme: images of the charities are all over their social media and website. The annual accounts show that Z spent $36m on marketing in the 2017 financial year. I am guessing that most of this went on other stuff, but it’s interesting to contemplate eh. How much is spent actually giving and how much is spent telling people about it? Is this perhaps Virtue Laundering?
That said, they did pay $99m in tax last financial year: probably more than either Mobil or BP did given transfer prices are often used to expatriate income and minimise taxation: I suspect paying the correct amount of local tax does far more Good in the Hood than the programme itself.
Z of course are not alone here: McDonalds is worth a look. When you buy a Happy Meal, I believe 10 cents is given to the Ronald McDonald Houses. This is of course Cause Related Marketing, and is really a marketing initiative. I did my dissertation on this stuff back in the day, so have been looking at it for a while.
There are two operational charities linked to Ronald McDonald House: a body running both Auckland and Wellington, and Christchurch (which also runs Invercargill). You can see all this information on the Charities Office website.
So – how much did McDonalds put into these facilities? All up: around $170k ($99k from a Global Grant, and $70k from an RMHC Operating grant) and only to the North Island Ronald McDonald House Charities NZ Trust.
Now, there is little publicly available information about all this. South Island received zip from McDonalds, at least as I could see by looking at their accounts quite a few times. The exception is the item called Money Boxes, which I assume is the change box at McDonalds – but that money comes from customers (I think).
If we assume that both the Global Grant and operating grant were covered by Happy Meals, then McDonalds sold 1.6m such meals last year. That sounds a little off, so I am guessing that the Happy Meals Cause Related Marketing covered the operating grant (meaning they sold 700k Happy Meals) and the Global Grant came from the PR budget.
The annual reports (as reported in the Herald) show some $40m sent offshore for trademark and service fees, and total NZ taxes of $16.4m.
Whatever way you cut it, it really does seem to be a good deal for McDonalds. Be interesting to see if some other entity wanted to buy naming rights: I reckon this is a good deal!
We are seeing blurred lines between charities, social enterprises, B Corps and for profit organisations, and it’s easy to get caught up in the hype of corporate responsibility. As we consumers get more cynical about marketing efforts, organisations seem to be using the virtues of Not for Profits to launder a positive corporate brand to the world. And that’s great – provided its on equal terms. However, looking at the above I can’t help but think of a phrase from my drinking days: go hard or go home. Really… the numbers above are rounding.
Love to talk with you if you think this is at all interesting.